Gov’t targets GHC30 bn through bonds, T- bills for first half of 2016

Government is hoping to raise about 30.4 billion Ghana cedis through the issuance of bonds, notes, and Treasury Bills for the first half of 2016.

The disclosure was contained in a government issuance calendar for the first half of this year.

According to government, the issuance calendar for the 1st half of 2016 was developed in line with the Medium Term Debt Strategy (MDTS) that specifies the aggregate amounts to be raised by instruments in the period.

Government also maintains that the issuance calendar has been modified to specify the aggregate amounts to be raised in the first half of the year without specifying the months for the intended borrowing.

Based on the revision, the aggregate borrowing amount for the 1st half 2016 is GH¢30,476.73 million out of which forecast maturities is GH¢27,779.00 and net issuance is GH¢2,951.00 million.

The January calendar is as follows:

Month January

91 Day T/Bill 2,100

182 Day T/Bill 1,700

1 Year Note 120

2 Year Note 300

3 Year Fixed Rate Bond 500

5 Year Fixed Rate Bond

“We believe that the combination of an overall plan for the half year and a more accurate detailed monthly borrowing plan, presented well in advance, should meet the requirements of market participants as it will ensure greater predictability and transparency,” the government document said.

However, there are fears that this new borrowings will lead to crowding out of private businesses and increase the public debt.

But investment analyst, Mike Cobblah, holds a different view.

He thinks it will rather lead to the reduction of the public debts, since majority of the debts will be used to pay off maturing debts.

Government last year raised a little over 50 billion Ghana cedis through the issuance of bonds and securities. For the half 2015 it raised about 25 billion Ghana cedis.